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According to this year’s National Retail Federation holiday survey, the average American will spend close to $700 this season on gifts, cards, decorations, and the like. This is one time when you want to be below average — way below. In fact, if you are in debt, just say no to gift buying this holiday. There is absolutely NO reason for you to go further into debt buying gifts for others. There are still 13.6 million Americans who are trying to pay off holiday debt from last year.


 1.  Which of the tips mentioned in the article would help you the most in steering clear of holiday debt? Explain.

2. Go to and click on Discounted Gift Cards.  Select “View All Available Gift Cards” and then pick one of the merchants that you would normally visit.  Assume that you buy the card.  What journal entry would this merchant make for the sale of this card? (In your answer, assume that the merchant must pay a transaction fee of 1%.)

3.  Assume that you redeem the card that you purchased in Question 2.  What journal entry would the merchant make for the redemption?


Pagliarini, Robert (2010). 10 Tips to Save Big Money This Christmas., December 8 (Retrievable online at